A whopping 90 percent of the small business owners surveyed nationally said that large corporations use loopholes to avoid paying taxes that the small businesses pay. They also view this as a problem, saying it harms their business.

When it comes to corporate tax loopholes, New Mexico has a doozy. What’s more, New Mexico is the only state in the western U.S. that allows multi-state corporations to have this particular advantage over its home-grown businesses. And that is shameful.

Multi-state corporations use the loophole to shelter their New Mexico profits in a state that does not collect corporate income tax (Delaware is the big favorite). Then when they file their New Mexico tax returns they can claim they simply didn’t make much here in the Land of Enchantment. Meanwhile, companies that do business only in New Mexico (hint: collectively, they are the largest employer in the state) are paying taxes on their profits.

Attempts have been made over the last several legislative sessions to close this unfair loophole—in fact Senator Peter Wirth (D-Santa Fe) has introduced such legislation (SB-9) again this year even though Governor Martinez has threatened to veto it. The Governor has said she doesn’t support closing this loophole because she doesn’t want to “pick winners and losers.” The existence of the loophole itself picks winners and losers and, sadly, the winners here are not New Mexico’s small businesses.

To be fair, Governor Richardson wasn’t supportive of closing this loophole either. Legislation to fix it has always met extreme resistance at the Roundhouse—namely in the form of corporate lobbyists who are looking out for their client’s best interests and throwing expensive parties for your lawmakers. While the executive and legislative branches have been failing us, though, the courts have been doing their job.

New Mexico’s Taxation and Revenue Department has taken a number of these corporate loophole-exploiters to court—most famously Wal-Mart—and won judgments against them. And the giants have paid up. So what’s the problem, you ask? The problem is, this is an expensive, inefficient, and time-consuming way to collect the income taxes that are rightly due to the state in the first place. And the folks at the TRD and in the courts certainly have better things to do than clean up a mess the Legislature and Governor refuse to touch.

Don’t laugh this off as some moral “fairness” issue—although it is. It’s also a very practical issue. All businesses need certain infrastructure and services in order to operate. They need roadways, an educated workforce, police and fire protection, and a court system to enforce their contracts. Since they all need this infrastructure, they should all pay for it. New Mexico’s small businesses are already at a disadvantage when it comes to competing with big corporations. They lack the buying power to get the best prices on everything from raw materials to health insurance. This loophole puts them at a further disadvantage. While they’re chipping in to keep the roads paved and the first responders at the ready, the big guys are getting a free ride. If that’s not an example of “winners and losers” then what is?

Alicia Manzano is NM Voices’ Outreach Director

February 13, 2012
FOR IMMEDIATE RELEASE

ALBUQUERQUE—As the Legislature considers a bill to index the minimum wage, a new report shows that full-time minimum wage earners have already lost $1,000 a year due to inflation since the wage was raised in 2009. Indexing the wage would make it rise in conjunction with the cost of living. Without indexing, the minimum wage loses its purchasing power, becoming less and less valuable over time. By 2020, the state’s $7.50 an hour minimum wage will have the buying power of less than $6.50.

“Most of the New Mexicans who earn the minimum wage are adults who are working more than part-time,” said Gerry Bradley, Research Director for New Mexico Voices for Children and the report’s author. “So the people who would be benefitting are the people who are paying the household bills and putting food on the table. Women and Hispanics would particularly benefit, as would New Mexicans who don’t have a college degree.”

Indexing the minimum wage would help reduce poverty in New Mexico, putting approximately $500 more a year in the pocket of each hard working New Mexican. Since low-wage workers tend to spend all of their income on day-to-day necessities, this additional money is likely to be spent in the local economy.

“If we don’t index the minimum wage, we’ll be at the same point in the near future that we were several years ago—needing to raise the minimum wage because it will be worth so much less. In the meantime, working New Mexico families suffer,” added Bradley.

The report is available online at: http://www.nmvoices.org/wp-content/uploads/2012/02/min-wage-indexing-2-10-12.pdf

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New Mexico Voices for Children is a nonpartisan, nonprofit organization advocating for policies to improve the health and well-being of New Mexico’s children, families and communities. 2340 Alamo SE, Suite 120, Albuquerque, NM 87106-3523; 505-244-9505 (p); www.nmvoices.org

Download this press release here (pdf)

Here is a graph that shows children’s enrollment in New Mexico Medicaid from late 2006 through the present, and then projected (by HSD) through 2013. From 2007 to 2010, enrollment grew at almost 7 percent per year, partly because of the recession but also because HSD was reaching out to families to enroll their kids. 

The graph shows that enrollment has gone absolutely flat since the summer of 2010. The graph also shows that HSD is continuing to project very low enrollment growth into the future—about 1 percent per year.

In November 2009, HSD gave a list to the Legislative Finance Committee of various “cost containment” measures they had undertaken to reduce costs in the Medicaid program.  One of the entries was “limit outreach/aggressive recertification.” Medicaid Director Julie Weinberg was quite candid in telling the Legislature and other public audiences that HSD had essentially ceased any special outreach to enroll children because the budget wouldn’t permit significant new enrollment. The results of that slow-down (together with a little improvement in the economy) are shown above.

At last year’s Legislative session, the Legislature and Governor were truly facing a potential crisis in the Medicaid program because the federal stimulus funds were set to expire (and did) on June 30, 2011. They came up with some $300 million in new state funding to fill that gap, and NM Voices for Children publicly thanked them on stepping up to the plate.

But now that this challenge has been met, there is no excuse to continue the slow-down in kids’ enrollment. There are still an estimated 50,000 New Mexico children who are eligible but not enrolled in Medicaid. Many of them are Native Americans and/or located in rural areas. We urge HSD to begin once again to focus with providers and advocates on how we can step up the enrollment of our children in Medicaid.

Children have a broad and unique range of health care needs, which is well-covered by Medicaid. It provides child preventive services, including immunizations and developmental screenings.  Appropriate health care can help children avoid preventable and serious chronic conditions like obesity, heart disease, and Type II diabetes, and promote adequate nutrition and physical activity. Vision, hearing, and dental care—often considered “extras” in health coverage for adults—are among the services children need in order to develop and achieve their full potential. These are services that lower-income kids can get if they are enrolled in Medicaid. If they are not, these kids will mostly do without, and their education will suffer along with their health. Please, let’s get these kids enrolled!

Nick Estes is NM Voices’ Deputy Policy Director

ALBUQUERQUE—Legislation that would require citizens to show a photo ID in order to vote would cost New Mexico taxpayers an estimated $1.8 million per year, or $5.5 million over three years. Three such bills are currently working their way through committee hearings in the state Capitol. The expenses would come from administration and implementation of such a law, ad campaigns to educate the public and avoid confusion on election day, and the cost of the actual IDs.

“Very little election fraud has been found by the New Mexico Secretary of State’s Office, so this is the proverbial solution in search of a problem,” said Gerry Bradley, Research Director for New Mexico Voices for Children and report author. “Since voter fraud is so rare, we consider voter ID laws an attempt at voter suppression.”

The groups most adversely affected by voter ID laws include the elderly, persons with disabilities, veterans, voters in rural areas, and racial and ethnic minorities.

“Even if the state pays for the photo ID—which it should—it still puts an unnecessary burden on people who have to find a way to get to a Motor Vehicle Division office in order to apply for the ID,” Bradley said.

States that have implemented voter ID laws but have required voters to pay for the IDs have found themselves the subject of lawsuits. “If you require the voter to pay for an ID they would not otherwise need, it can amount to a poll tax, which is a violation of civil rights laws,” said Bradley. “Voting is a constitutionally protected right and the state should make it easier for people to participate in elections, not more difficult.”

The report draws on cost estimates from other states that have implemented voter photo ID laws.

The report, Analysis: Voter ID Laws are Costly, is available online at http://www.nmvoices.org/wp-content/uploads/2012/02/Voter-ID-Cost-2-12.pdf 

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 New Mexico Voices for Children is a nonpartisan, nonprofit organization advocating for policies to improve the health and well-being of New Mexico’s children, families and communities. 2340 Alamo SE, Suite 120, Albuquerque, NM 87106-3523; 505-244-9505 (p); www.nmvoices.org

Download this press release here (pdf)

Taxes are a proxy—for something necessary, not something bad.

Imagine how we would sound if we used words like ‘roads,’ ‘education,’ ‘public safety,’ and ‘heath care’ instead of ‘taxes.’

Would you want to be heard saying, “I can’t believe I pay for roads when I fill my gas tank”? Or, “first responders really hike up the cost of my mortgage.” Or, “my water bill wouldn’t be so bad if I could get out of paying for public safety.” It might make us sound stupid or shallow but we would, at least, be speaking more honestly about taxes than we do now.

Taxes are a big topic of discussion at the Roundhouse these days, thanks to a couple of recent studies that rank the states on their various tax rates. New Mexico’s taxes are either too high or too low, depending on which study you favor. But imagine how the conversations might sound if legislators used the same technique cited above when talking about taxes.

You might hear, “our network of roads and traffic signals is a burden to new businesses.” Or, “companies don’t relocate here because we educate our populace.” Or, “we’re never going to recruit new business until we cut back on our court system.”

The point of this exercise is that when we talk about taxes we’re generally taking about the wrong issue. What we should really be talking about is what we want to accomplish as a community. What kind of state we want to live in. Do we want to live in a state where 25 percent of children lived in poverty before the recession? Are we OK with only providing pre-kindergarten to 15 percent of our 4-year-olds? Can we ignore the fact that tens of thousands of our children can’t see a doctor for routine health care?

You’d be hard pressed to find a legislator on either side of the aisle who would answer yes to these questions. But you would find some that want to cut our tax rates even though such a move would only sap our ability to solve these problems.

Taxes matter. It matters how much money the state collects and from whom it is collected. But what matters most is why we collect them in the first place. Roads. Education. Public safety. Health care. These are not partisan issues. Most of us agree that we want these things—not just for ourselves but for our families, our neighbors, and the generations that will follow us. Maybe if we spent more time talking about why we collect taxes, we would agree more on how much we should collect and from whom.

Bill Jordan in NM Voices’ Policy Director

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January 18, 2012
FOR IMMEDIATE RELEASE

ALBUQUERQUE—New grades are out and, when it comes to tracking whether tax breaks are creating jobs, it’s a disappointing D+ for New Mexico. The grades were issued by the group Good Jobs First in their report “Money-Back Guarantees for Taxpayers: Clawbacks and Other Enforcement Safeguards in State Economic Development Subsidy Programs.” In the report, New Mexico is ranked 45^th in the nation, tying with two other states for that spot. Only three states ranked lower.

The report analyzed several economic development incentives and subsidy programs in states across the nation. It found that there is great inconsistency with how well states monitor, verify and enforce their incentives to ensure that they are fulfilling performance measures like creating jobs.

“It’s politically popular to hand out tax breaks with the idea that they will create jobs,” said Gerry Bradley, Research Director for New Mexico Voices for Children. “Unfortunately, especially in New Mexico, tracking these economic incentives to make sure taxpayers are getting their money’s worth is considerably less popular. When you give a ‘job-creation’ tax break to a company and they don’t create any jobs, you’re really just handing out corporate welfare,” he added.

“It’s discouraging that Governor Martinez is hoping to pass another $55 million worth of tax breaks when we do such a poor job of verifying that the breaks we already have actually create jobs,” Bradley said.

The report looked at five incentive programs in New Mexico. While all five require that companies report their performance, the state only verifies these reports in three of the five. Only one incentive program (industrial revenue bonds) requires that money be paid back if performance measures are not met. All five incentive programs failed completely in the category of online disclosure of enforcement practices.

“Money-Back Guarantees for Taxpayers” is a companion report to “Money for Something,” which Good Jobs First issued last month. Both reports can be found on the group’s website at www.goodjobsfirst.org.

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 New Mexico Voices for Children is a nonpartisan, nonprofit organization advocating for policies to improve the health and well-being of New Mexico’s children, families and communities. 2340 Alamo SE, Suite 120, Albuquerque, NM 87106-3523; 505-244-9505 (p); www.nmvoices.org

Download this press release here (pdf)

January 17, 2012
FOR IMMEDIATE RELEASE

ALBUQUERQUE—More New Mexico children have fallen into poverty as a result of the recession, according to the 2011 New Mexico KIDS COUNT report.

The annual report, released today, is published by New Mexico Voices for Children.

Even before the Great Recession, New Mexico had very poor national rankings in terms of the economic, health, and educational well-being of its children. The most recent data show the recession and the slow recovery have made things worse.

 “Fewer families are economically secure now and more children—especially those living in families with income below the poverty level—live in homes where employment for parents is either not full-time, not year-round, or both,” said Christine Hollis, New Mexico KIDS COUNT director. “The chronic stress of living in such a situation has a negative impact on children and their ability to achieve future success.”

 More than half of New Mexico’s children live in poverty or in low-income families that have trouble making ends meet. The percent of children living in single-parent families has increased from 33 percent in 2000 to 42 percent in 2010. Single-parent families are more likely to suffer economic hardship than two-parent families. Only three other states have higher percents of children in single-parent homes.

 “After three years of deep state budget cuts, New Mexico needs to be reinvesting in programs that serve children—child care, early learning K-12 education, unemployment benefits, and other programs that help families that are struggling with the loss of income and other resources,” Hollis added.

The NM KIDS COUNT 2011 cites data on poverty and other indicators of child well-being. Where available, data are broken down by county and school district. The annual report was released today during a press conference in the Rotunda of the state Capitol.

The report is available online at: http://www.nmvoices.org/nm-kids-count

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KIDS COUNT is a program of New Mexico Voices for Children and is made possible by grants from the Annie E. Casey Foundation.

 New Mexico Voices for Children is a nonpartisan, nonprofit organization advocating for policies to improve the health and well-being of New Mexico’s children, families and communities. 2340 Alamo SE, Suite 120, Albuquerque, NM 87106-3523; 505-244-9505 (p); www.nmvoices.org

Download this press release here (pdf)

The consultants hired by the state to recommend changes to the program have completed their assessment of the redesign and have made their report to the governor. Any day now she will decide which of the recommendations she’ll implement. No doubt, some administrative changes will be welcomed by everyone. However, most advocates for health care for kids fear the governor may also elect to implement “cost sharing” that would likely result in low-income children losing access to their health care.

Two governors named Scott are proposing changes to their states’ Medicaid program that will be devastating for their kids. Governor Rick Scott is proposing a plan for Florida that could result in 800,000 people, most of them children, losing their health care. In Wisconsin, Governor Scott Walker (who faces a recall election for implementing other unpopular policy changes) is calling for a plan that could result in 64,000 losing their health care coverage. 

Let’s not go where the Scotts have gone! New Mexico can and should do better.

Bill Jordan is NM Voices’ Policy Director

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January 9, 2012
FOR IMMEDIATE RELEASE

ALBUQUERQUE—With the state’s vast network of universities, community colleges, and branch campuses—coupled with relatively low tuition and the lottery scholarship—a post-secondary education in New Mexico has been relatively inexpensive. But the recession and changes in the state budget have made college much less affordable. Moreover, tuition hikes have squeezed the state’s lottery scholarship fund.

Those are some of the main conclusions from a report released today by New Mexico Voices for Children, “Higher Education Expenditures and College Affordability in New Mexico.”

“The lottery scholarship has been a great success in making a college education possible for New Mexicans,” said Gerry Bradley, NM Voices’ Research Director and report author. “But by the state’s own reckoning, the fund will near depletion in 2015 even if tuition is not raised again,” he added.

The report shows that while more future jobs will require some college education, New Mexico is actually graduating fewer high schoolers. And, while the onset of the recession has led to an increase in college enrollment, the state has steadily decreased the amount of money it spends on a per-student basis.

“Lawmakers did not have to deal with the budget shortfalls of the last few years by cutting funding to programs like higher education. Instead of raising tuition at a time when more and more people need to improve their education and job skills, lawmakers could have chosen to raise new revenue. But they forced the colleges to raise the revenue from students,” Bradley added.

One of the recommendations in the report is to make the lottery scholarship based on need so that it is available only to students who could not afford to attend college without it.

The report is available online at: http://www.nmvoices.org/wp-content/uploads/2012/01/Higher-Ed-in-NM-12-11.pdf

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New Mexico Voices for Children is a nonpartisan, nonprofit organization advocating for policies to improve the health and well-being of New Mexico’s children, families and communities. 2340 Alamo SE, Suite 120, Albuquerque, NM 87106-3523; 505-244-9505 (p); www.nmvoices.org

Download this press release here. (pdf)

Congratulations and gratitude goes out to our friends at the Center on Law and Poverty for representing the workers and winning the case. Our thanks also go out to the injured workers who were courageous enough to bring the lawsuit on behalf of the 10,000 agricultural workers who will now benefit directly from workers’ compensation benefits. It’s a good time to remember that when more of us are protected, all of us benefit from a safer and more just society.

Bill Jordan is NM Voices’ Policy Director

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